Extortionate Remortgage Product fees

joAnn

I am considering dipping my toe into BTL as I have the option of purchasing a flat in my building for a good price and the current owner wishes to stay as a tenant for the time being.

My current flat has recently been occupied by a friend who was house sitting and wishes to remain on an AST.

I would need to remortgage my current flat, to pay off the remaining 5 years and and a 2nd charge, but I have good equity. The remortgage would enable me to buy the next flat and put down nearly a third of the purchase price as a deposit. So it is two separate mortgages.

My problem are the mortgage fees the lender is quoting. Since I am not a professional landlord, I would only be considered for a specialist product with each fee being approx £15k!! I nearly fell through the floor. It seems other options cant be considered for one reason or another such as EPC or not owner occupied etc and this lender being able to meet my lender requirements.

I am happy to wait and shop around, but am I going to face the same fees with every lender? The product is a 2 year deal for each mortgage and can look around once deal is finished. Happy to take a calculated risk, but not be stupid.

Any helpful thoughts?

Yorkie1

I can't comment on your specific query re. product fees. But these points also occur to me:

I don't know if the rules for Sale and Rent Back are different for private individuals who rent the property back to the former owner; hopefully others can comment one way or the other whether that would be an obstacle to be overcome in your prospective purchase of the tenanted flat.

Have you done a lot of investigation into the requirements for being a landlord? How the Renters' Rights Act 2026 will impact? Taxation aspects? It's getting more complex, and many experienced landlords are getting out of the market rather than transition to the new position. That might suggest that it's not a great time for a new landlord to be dipping a toe into the market.

ACG

Have you spoken to a broker?

There are a few things here that sound not quite right and im wondering whether the water is a bit muddied causing some confusion.